Sensitivity to market needs critical for success
Expert says product improvement won't help unless it becomes relevant to the customers' requirements
Despite being a promoter of quality and business excellence, Curt Reimann, the first director and co-founder of the internationally recognised Malcolm Baldrige National Quality Award in the United States, said the best-managed firm was not necessarily the one that could produce flawless products, but the one that was sensitive to the market’s needs.
One of the top issues for today’s businesses is how to accommodate rapid changes in the marketplace, and thus it becomes imperative that companies find mechanisms to anticipate market needs, he said.
“In a rapidly changing environment, you can improve all the time on your current product, and in technical terms, the product is almost perfect. But if you don’t look at your customers’ needs, it won’t serve [them]. It is not relevant to the market,” Reimann told a recent news conference in Bangkok.
For instance, 3M has utilised a network of leading practitioners in the dental-care industry to help it gain an understanding of how the market will move in the future, since these experts have a key influence on the market, he said.
Reimann said a good company today could become an ordinary company in the next five years if it did not improve. But this requires sensitivity to market requirements.
“The value is not in the quality but in the anticipation” of market needs, he said. “As an award giver and productivity promoter, we try to help organisations to become much more flexible in their strategic planning ... companies which can constantly move from one business model to another, using our framework” of quality-management criteria.
“Innovation is not just about products or service, but also in business-model innovation.”
Reimann said achieving business excellence would become even harder in the future, since businesses have improved significantly over the years.
“In the past when we bought a car, we would like to wait three or four years for the manufacturer to get rid of all the defects. But today if cars are not produced with no defects since the first year ... you have seen all the news in the media” that such manufacturers are attacked, he said.
Speaking at the same press event, Phanit Laosororat, executive director of the Thailand Productivity Institute, who invited the American expert to meet with Thai businesses and media in Bangkok, said that after an outcry from the private sector over the increase of the daily minimum daily wage to Bt300, the government seemingly tried to blame the institute for its failure to raise national labour productivity. However, such an effort takes time.
“The Bt300 minimum wage policy has put nearly all business operators, especially SMEs [small and medium-sized enterprises], into the ICU [intensive-care unit]. But if this [national productivity improvement] had been done earlier, this crisis would not have occurred,” he said.
Phanit said the quality-improvement framework was not a “magic pill” that worked overnight.
“The framework doesn’t help us become ‘supermen’ but it assists us to become sensible to change. The framework suggests that firms find customer needs and stay close to the market and their teams in the organisations,” he said, adding that it also depended on how companies applied their “intellect” in practical ways.
Reimann said US productivity had doubled over the past 20-30 years as evidenced by its industrial output, which is still very high despite a dwindling workforce.
A challenge for the Thai Productivity Institute should be to narrow the gap between leading companies and what most other companies can do, he said.
Phanit said making Thai companies understand the national quality-improvement framework continued to be a challenge, especially for SMEs, which still perceive the national quality standard as “not approachable”.
The institute is also aiming to expand the use of the national quality-improvement framework to cover more of the organisations that have interactions with a high number of customers, including government agencies and educational institutes.
Since 2002, the Thai Productivity Institute has given awards modelled on the Malcolm Baldrige National Quality Award to organisations that are considered to have business excellence and quality achievement.
